China’s Tangshan mulls steel output cuts beyond winter

28-Jan-2019

China’s largest steelmaking city of Tangshan is considering extending output restrictions by six months after looser restrictions this winter failed to adequately control pollution.

The city is considering two phases of cuts — blanket 50pc cuts in March followed by cuts that vary by district from April-September. A city notice sent to mills could not be confirmed. Some mills said it was only a draft plan inviting comments and had not been settled, while a Tangshan mill official said the notice was real and mills would be required to halve sintering of iron ore fines under the plan.

Tangshan city officials are under scrutiny for having some of the worst air quality in China. The city in Hebei province is on track to miss its air quality targets for winter, which are calculated on a six-month basis. Its PM2.5 particulate matter emissions jumped in November-December 2018 from a year earlier when weather and stricter policies improved air quality. The city this year was supposed to cut PM2.5 emissions by 4pc. Less windy weather to clear the skies of haze and looser tiered restrictions based on installed pollution control technology led to increased pollution levels.

Tangshan adopted a four-tiered system to control mill emissions from 1 October 2018 to 31 March 2019, which required nearly two-thirds of the mills to cut output by 30pc. Mills with an A grade are not required to make any cuts, while mills graded B, C and D need to cut pig iron output by 30pc, 50pc and 70pc, respectively. D-grade mills are required to completely halt sintering.

Air quality alerts have led to repeated temporary blanket cuts, including the latest round from 22-25 January.

Tangshan cut around 12mn t/yr of crude steel capacity in 2018, most of it in the Fengnan district that has 10 steel mills with 26mn t/yr of production capacity. The district will shed 2.28mn t/yr of crude steel and pig iron capacity.

Source: REUTERS